Estate Planning Blog Articles

Estate & Business Planning Law Firm Serving the Providence & Cranston, RI Areas

What Does a Last Will and Testament Do?

Your will is the foundation of an estate plan, used to instruct your executor on distributing property, naming a guardian for minor children, creating a legacy and ensuring that your beneficiaries receive what you want. The will can also serve to disinherit a family member, as explained in the recent article “Last will can both include and exclude heirs” from The Record-Courier.

The process of cutting someone out of a will is known as “disinheriting.” Hurt feelings and tension among family members are inevitable when someone is disinherited. However, if the goal is to avoid litigation between family members, an experienced estate planning attorney will be needed. It takes careful planning to avoid creating a will contest. Disinheriting adult children increases the likelihood of them contesting the validity of the will.

Laws concerning inheritance rights vary. In Nevada, for instance, unless there is a prenuptial agreement, you cannot completely disinherit a spouse. Even if your will attempts to disinherit a spouse, in some cases the law will actually override the instructions in the will or trust and award a portion of the estate, known as the elective share, to a surviving spouse. If this is a concern, check with your estate planning attorney.

Adult children can be disinherited. However, minor children are often protected against disinheritance.

Parents can be disinherited if they outlive the decedent, since they are not always legally entitled to a share of their children’s estate.

Extended relatives can also be disinherited. Some estate planning attorneys will conduct a search for missing heirs or beneficiaries while preparing an estate plan to be sure there are no unknown legal heirs who might make themselves known to a decedent’s surviving spouse or other heirs.

Estranged biological children can be disinherited. However, the last will and testament must be properly prepared.

The reasons for disinheritance very from estrangement to the decedent believing their family member is financially secure and doesn’t need the inheritance. It is not necessary for the last will and testament to explain the reason for the disinheritance. However, it is advised to use a disinheritance clause to ensure the heir or beneficiary is removed and will not inherit under the will.

To protect the integrity of the will, it is also advised to include a no-contest clause in the will. This is a provision expressing a directive to eliminate the share allocated to any beneficiary who takes action to contest the testator’s intents as expressed in the will.

The last will and testament is the person’s last communication with loved ones. There is no further opportunity for clarification once they have passed. This is why it’s so important to have a will and for the will to explicitly state the names of the beneficiaries and the names of any disinherited persons.

When you meet with your estate planning attorney to create or update your last will and testament, be prepared to tell them if there are any family members who you want to disinherit, so they can create a last will and testament and an estate plan designed to withstand challenges.

Reference: The Record-Courier (Dec. 17, 2022) “Last will can both include and exclude heirs”

Is an Estate Plan Battle Looming?

Some people don’t create an estate plan before they die. Or, if they do, they failed to have an estate plan created with an experienced estate planning attorney and their will is unclear, or even invalid. They might die with debts conflicting with their wishes. These and other situations can lead to a long and expensive probate period, as described in the article “In-fighting Families, Wills, Laws & Other Things That Could Hold Up Probate” from yahoo!.

How long does it take for an estate to move through the probate process? It depends upon the complexity of the estate and how well—or poorly—the estate plan was created.

What is probate? Probate is the process where the court oversees the settlement of an estate after the owner dies. If there is a will, the court authenticates the will and accepts or denies the executor named in the will to carry out its instructions. The executor is usually the decedent’s spouse or closest living relative.

How does probate work? Probate is governed by state law, so different states have slightly different processes. The first thing is authenticating the will and appointing an executor. The court then locates and accesses all of the property owned by the decedent. If there are any debts, the estate must first pay off the debts. When the debts have been paid, the court can distribute the remaining assets in the estate to heirs.

If there is no will, the person is said to have died intestate. The court may then appoint an administrator to carry out the necessary tasks of paying debts and distributing assets. The administrator is paid from the estate.

How long does it take? It depends. If the decedent had placed most of their assets in trust, those assets are not subject to probate and are distributed according to the terms of the trust. If there are multiple properties in multiple states, probate has to be conducted in all states where property is owned. In other words, probate could be six months or three years.

Estate size matters. Certain states use the total value of the estate to determine its size, rather than examine individual properties. Possessions subject to probate usually include personal property, cash and cash accounts, transferable accounts with no named beneficiaries, assets with shared ownership or tenancy in common and real estate.

Possessions not typically subject to probate include insurance proceeds, accounts owned as Joint Tenant with Rights of Survivorship, accounts with a beneficiary designation and assets owned in trusts.

Probate varies from state to state. Probate is not nationally regulated, and state-level laws vary. An estate could be swiftly completed in one state and take a few months in another. Some states have adopted the Uniform Probate Code (UPC), designed to streamline the probate process by creating standardized laws. However, only 18 states have adopted this code to date.

Fighting among heirs makes probate take longer. Even small disputes can extend the probate process. If there are estranged family members, or someone feels they deserve a larger share of the estate, conflicts can lead to probate coming to a full stop.

An experienced estate planning attorney can help structure an estate plan to minimize the amount of assets passing through probate, while ensuring that your wishes are followed and loved ones are protected.

Reference: yahoo! (Nov. 21, 2022) “In-fighting Families, Wills, Laws & Other Things That Could Hold Up Probate”

When Should an Estate Plan Be Reviewed?

If your parents don’t remember when they last reviewed their estate plan, then chances are it’s time for a review. Over the years, wishes, relationships and circumstances change, advises the recent article, “5 Reasons To Have Your Parents’ Estate Plan Reviewed,” from Forbes. An out-of-date estate plan may not achieve your parent’s wishes, or be declared invalid by the court. Having an estate planning attorney review the estate plan may save you money in the long run, not to mention the stress and worry created by an estate disaster. If you need reasons, here are five to consider.

Financial institutions are wary of dated documents. Banks and other financial institutions look twice at documents that are not recent. Trying to use a Power of Attorney that was created twenty years ago is bound to create problems. One person tried to use a document, but the bank insisted on getting an affidavit from the attorney who prepared it to be certain it was valid. While the son was trying to solve this, his mother died, and the account had to be probated. A “fresh” power of attorney would have solved the problem.

State laws change. Things that seem small become burdensome in a hurry. For example, if someone wants to leave a variety of personal effects to many different people, each and every one of the people listed would need to be located and notified. Many states now allow a separate writing to dispose of personal items, making the process far easier. However, if the will is out of date, you may be stuck with a house-sized task.

Legal document language changes. The SECURE Act changed many aspects of estate planning, particularly with regard to retirement accounts. If your parents have retirement accounts that are payable to a trust, the trust language must be changed to comply with the law. Not having these updates in the estate plan could result in an increase in income taxes or costly fees to fix the situation.

Estate tax laws change. In recent years, there have been many changes to federal tax laws. If your parents have not updated their estate plan within the last five years, they have missed many changes and many opportunities. It is likely that your parents’ assets have also changed over the years, and the documents need to reflect how the estate taxes will be paid. Are their assets titled so that there are enough funds in the estate or trust to cover the cost of any liability? Here’s another one—if all of the assets pass directly to beneficiaries via beneficiary designations, who is going to pay for the tax bills –and with what funds?

Older estate plans may contain wishes from decades ago. For one family, an old will led to a situation where a son did not inherit his father’s entire estate. His late sister’s children, who had been estranged from him for decades, received their mother’s share. If the father and son had reviewed the will earlier, a new will could have been created and signed that would have given the son what the father intended.

These types of problems are seen daily in your estate planning attorney’s office. Take the time to get a proper review of your parent’s estate plan, to prevent stress and unnecessary costs in the future.

Reference: Forbes (May 25, 2021) “5 Reasons To Have Your Parents’ Estate Plan Reviewed”

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